Support measures announced during the Singapore Budget 2020 exceeded even the most optimistic predictions. In an unprecedented move, Finance Minister Heng Swee Keat announced the launch of not one, but two special support packages totalling $5.6 billion.
Designed to benefit Singaporean companies, workers and households, both packages comprise a mix of broad measures and targeted schemes.
In the first, named the Stabilisation and Support Package, the Government has set aside $4 billion to help tide firms and workers over the present economic slowdown, exacerbated by the spread of COVID-19.
The second $1.6 billion package, named the Care and Support Package, is meant to provide relief and assistance to households in the interim.
While not new, the sheer scope of these (and other) measures announced as part of this year’s budget is no doubt exciting. Yet, what do all these big, flashy numbers mean? How can the average Singaporean family best leverage the generous handout packages?
Read on for our take on what the Singapore Budget 2020 means for you.
1. You should stay committed to your job
With the economy takes a blow from COVID-19 — and some sectors hit harder than others — worrying about whether you’ll be able to keep your job is a given.
But don’t panic just yet — the Government has pledged to offset 8% of all local wages for the next 3 months through the Job Support Scheme. This will be capped to $3,600 per worker per month.
In addition, the Corporate Income Tax Rebate will also benefit firms with 25% rebate on payable tax for the year of assessment (YA 2020). There are also improvements to the Wage Credit Scheme through which the Government co-funds wage increases, most notably a raise in the gross wage cap from $4,000 to $5,000 per month. This essentially makes it easier for your company to fund your salary increments.
These measures are meant to help firms maintain healthy cash flow, which is a crucial factor in staying afloat during slowdowns.
Additionally, five sectors — tourism, aviation, retail, food services, and point-to-point transport services — will also receive extra support in the forms of additional funding, property tax rebates, bridging loans and rental waivers, due to COVID-19’s malignant effects.
So, while the outlook is bleak, you may not necessarily need to give up on your current job.. Staying committed to your present company to ride out the storm together may be a viable choice after all.
And as for COVID-19, $800 million has been put aside for frontline authorities to fight the outbreak. So stay calm, keep washing those hands and always remember to practise good personal hygiene.
2. You should up-skill
Lifelong learning and skills upgrading is another area that has received a boost under Budget 2020, and you’d do well to take heed.
All Singaporeans aged above 25 can look forward to a SkillsFuture credit top-up amounting to $500 by October 2020. If you’re aged 40-60, you can expect another $500 top-up (total $1,000). But note that these top ups will expire in 2025 to encourage early upskilling. So, go on and take up that SEO class.
Firms can take advantage of a new SkillsFuture Enterprise Credit (up to $10,000) to offset 90% of out-of-pocket costs of business transformation, job redesign, and skills training. So take the initiative and ask your company to send you for courses that will help you progress in your career.
Middle-aged workers will receive special assistance through the SkillsFuture Mid-career Support Package, which will double the number of job placements for middle-aged locals by 2025.
Part of this initiative entails a hiring incentive for employers who hire local job seekers aged 40 and above through a re-skilling programme. For each eligible worker, the Government will provide 20% salary support to the employer for six months, capped at $6,000 in total.
Additionally, a slew of wage initiatives and credit schemes will assist employers to accommodate an older workforce and employees’ desires to have longer careers.
So, with the expanded funding and additional support, you could consider upgrading your skills, or even reskilling to another industry altogether.
3. You can worry less about rising living costs
To further allay Singaporeans’ concerns, Minister Heng announced the Care and Support Package for households, expected to cost the Government $1.6 billion in total. Comprising cash payouts, U-Save rebates, S&CC concessions and more families can look forward to receiving between $1,300 to $1,800 in benefits this year.
Let’s zoom into the cash payouts. Singaporeans aged 21 and above will receive $300, $200 or $100, depending on their income level. Every Singaporean with at least 1 child under 20 years old will receive an additional $100.
For Singaporeans aged 50 and above, a special treat awaits — you can receive a one-time $100 top-up in your PAssion Card, which can be further used to offset daily expenses. If you don’t have a PAssion Card, apply for one for free to receive your $100.
As usual, the lower-income will stand to benefit the most, with extra measures including additional 20% Workfare payment (minimum of $100); and $100 grocery vouchers per year for 2020 and 2021.
Finally, one of the concessions ceded by the government is that the GST should not increase this year. Therefore, GST shall remain at 7% in 2020. Any hikes in GST would now take place in 2021 at the earliest.
4. You may be able to get your dream HDB flat
Budget 2020 also held some hope for Singaporeans seeking to get a place of their own, but were up till now stymied by financial factors.
First-time homeowners can now enjoy up to $160,000 in housing grants. But that’s not all — the monthly household income cap was raised to $14,000 for HDB flats and $16,000 for executive condominiums — a move that’s expected to benefit a further 16,000 households.
5. You should top up your (or loved ones’) CPF
Another scheme announced during Budget 2020 is designed to encourage Singaporeans to meet the Basic Retirement Sum (BRS) — pegged at $90,500 for those turning 55 in 2020; $93,000 in 2021; and $96,000 in 2022.
Under the Matched Retirement Savings Scheme, from 2021 to 2025, the government will match every dollar of cash top up made into accounts of Singaporeans aged 55 to 70 who do not currently meet the BRS. The sum matched is capped at $600 per year.
So don’t leave money on the table — strive to top up the CPF Retirement Accounts for yourself or your loved ones.
Read these next:
Singapore Budget 2020 [LIVE]: Key Highlights And Announcements
Singapore Budget 2020: $800 Million For COVID-19 Recovery Package
Will My Travel Insurance Cover Novel Coronavirus (COVID-19)?
Love In The Time Of Coronavirus: 6 Activities For Your Date Nights At Home
[NEW CARD] Citi Cash Back+ Card Review: 1.6% Cashback On All Spend
By Alevin Chan
A Certified Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimize happiness and enjoyment in his life.
The post How Singapore Budget 2020 Affects HDB, CPF & Living Costs appeared first on SingSaver Blog.